I can "hear" the traffic noise, horns, etc. up to a few miles from the source. The decibel level associated with that is usually quite modest (50s and low 60s under worst-case conditions, with a light breeze blowing directly from the source). In the back yard (house acting as a sound wall) it's barely audible. Where my brother lives (near I-80, and formerly across the street from I-5, with sound walls in both locations), the sound levels are quite livable.

Yes, it can be loud if you're a short distance away from a crossing and get the horns at close range, wall or not. Even the bells from light rail in quiet zones can be annoying. But there aren't many people in that situation, and sound walls do keep things to a dull roar. The NIMBYs - really, the anti-rail (and anti-highway (and anti-everything)) crowd - usually don't live there, and are stirring up complaints (as Bob's experiment brilliantly shows) for other purposes.

Same thing happens with aircraft noise: I live under the landing pattern of an airport, about 10 miles out. Right near where inbounds pick up the ILS. Most heavies (typically freighters) cross me at about 3000', and aren't horribly noisy - I usually sleep through them even at 3-6AM. The noisiest traffic is military (C5's, C17's, and F16's shooting touch and goes during the day, and Air Guard choppers). There's a constant drumbeat of noise complaints, though, from an area about 5-10 miles farther away, where the inbounds cross at about 6-8000' above ground level. But no complaints about the GA airport right near them. Go figure.